AIRPORT DISTRICT NO. 1 OF JEFFERSON DAVIS PARISH. Jennings, Louisiana COMPONENT UNIT FINANCIAL STATEMENTS AS OF AND FOR THE YEAR ENDED APRIL 30, 2008

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1 OFFIC.ftL FILE COPY DO'NOT SEND" OUT (Xerox necessary r.opic5 from this v HIT' PI ACE AIRPORT DISTRICT NO. 1 OF JEFFERSON DAVIS PARISH COMPONENT UNIT FINANCIAL STATEMENTS AS OF AND FOR THE YEAR ENDED APRIL 30, 2008 Under provisions of state law, this report is a public document Acopy of the report has been submitted to the entity and other appropriate public officials, The report is available for public inspection at the Baton Rouge office of the Legislative Auditor and, where appropriate, at the office of the parish clerk of court. Release Date 1LUL

2 AIRPORT DISTRICT NO. 1 OF JEFFERSON DAVIS PARISH TABLE OF CONTENTS STATEMENT TITLE OR SCHEDULE PAGE INDEPENDENT AUDITOR'S REPORT 1 BASIC FINANCIAL STATEMENTS GOVERNMENT-WIDE FINANCIAL STATEMENTS Statement of Net Assets A 3 Statement of Revenues, Expenses, and Changes in Net Assets B 4 Statement of Cash Flows C 5 NOTES TO FINANCIAL STATEMENTS 6-13 INTERNAL CONTROL AND COMPLIANCE 14 Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on and Audit of Financial Statements Performed in Accordance with Government Auditing Standards Schedule of Findings and Responses 1 17 Schedule of Prior Year Findings and Questioned Costs 2 18 Report on Compliance with Requirements Applicable to Each Major Program and on Internal Control over Compliance in Accordance with OMB Circular A Summary of Expenditures of Federal Awards 3 21

3 BROADHURST, HAMILTON & COMPANY CERTIFIED PUBLIC ACCOUNTANTS ROBERT C. BROADHURST, CPA (1989) JOE E. HAMILTON. CPA BARBARA B. HAMILTON, CPA NICOLE D. BROUSSARD, CPA 626 N. AVENUE G P.O. DRAWER 505 CROWLEY, LOUISIANA TEL: (337) FAX: (337) October 28, 2008 INDEPENDENT AUDITOR'S REPORT To the Board of Commissioners Airport District No. 1 of Jefferson Davis Parish Jennings, LA We have audited the accompanying financial statements of the business-type activities of the Airport District No. 1 of Jefferson Davis Parish,, as of and for the year ended April 30, 2008, and the supplementary schedules, as listed in the table of contents. These financial statements and schedules are the responsibility of the Airport District No. 1 of Jefferson Davis Parish's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of Am erica and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the business-type activities of the Airport District No. 1 of Jefferson Davis Parish as of April 30, 2008, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued our report dated October 28, 2008, on our consideration of the Airport District No. 1 of Jefferson Davis Parish's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control overfinancial reporting oron compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. The Airport District No. 1 of Jefferson Davis Parish has not presented management's discussion and analysis that accounting principles generally accepted in the United States has determined is necessary to supplement, although not required to be part of, the basic financial statements. Our audit was conducted for the purpose of forming an opinion on the basic financial statements of the Airport District No. 1 of Jefferson Davis Parish taken as a whole. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by the U. S. Officeof Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. BROADHURST, HAMILTON & COMPANY Certified Public Accountants

4 GOVERNMENT-WIDE FINANCIAL STATEMENTS

5 AIRPORT DISTRICT NO. 1 OF JEFFERSON DAVIS PARISH PROPRIETARY FUND - ENTERPRISE FUND STATEMENT OF NET ASSETS AS OF APRIL ASSETS Current Assets: Cash and cash equivalents Accounts receivable, net of allowance for doubtful accountants Due from governments Prepaid insurance Total Current Assets Non-Current Assets: Utility deposits Capital assets - net of accumulated depreciation Total Non-Current Assets $ 419,657 80,502 90, $ $ $ TOTAL ASSETS $ LIABILITIES Current Liabilities: Accounts payable Prepaid revenue TOTAL LIABILITIES 56, NET ASSETS Invested in capital assets, Net of related debt Unrestricted fund balance $ 5,875, ,050 TOTAL NET ASSETS $ The accompanying notes are an integral part of this statement. STATEMENT A

6 AIRPORT DISTRICT NO. 1 OF JEFFERSON DAVIS PARISH PROPRIETARY FUND - ENTERPRISE FUND STATEMENT OF REVENUES, EXPENSES. AND CHANGES IN NET ASSETS FOR THE YEAR ENDED APRIL 30, 2008 OPERATING REVENUES: Property rental Property rental (In-kind) Gallonage rental Total Operating Revenues 415,945 11, $ 443,657 OPERATING EXPENSES: Advertising, Dues & Subscriptions: Dues & subscriptions Advertising & printing Utilities and Telephone: Utilities Telephone Materials, Supplies and Repairs: Repairs - Airport Repairs - Equipment Supplies Other Operating Expenses: Airport contract management (includes in-kind $11,280) Professional fees Insurance Miscellaneous Depreciation expense Total Operating Expenses OPERATING INCOME/(LOSS) 1, ,096 3,732 15, ,280 20,200 17, $ $ NON-OPERATING REVENUES/(EXPENSES): Interest Income/Expense Total Non-Operating Revenues/(Expenses) INCOME/(LOSS) BEFORE CONTRIBUTIONS CAPITAL CONTRIBUTIONS NET INCREASE IN NET ASSETS NET ASSETS - BEGINNING OF YEAR $ 55, $ 677, NET ASSETS - END OF YEAR The accompanying notes are an integral part of this statement. STATEMENT B

7 AIRPORT DISTRICT NO. 1 OF JEFFERSON DAVIS PARISH PROPRIETARY FUND - ENTERPRISE FUND STATEMENT OF CASH FLOWS FOR THE YEAR ENDED APRIL CASH FLOWS FROM OPERATING ACTIVITIES: Receipts from customers and users Payments to suppliers of goods and services Net Cash Provided by Operating Activities $ 363,654 (134,110) $ CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Acquisition and construction of capital assets Contributed capital - Capital grants Net Cash Provided/(Used) by Capital and Related Financing Activities $ (670,233) $ ( ) CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from redemption of investments Interest on investments Net Cash Provided/(Used) by Investing Activities $ NET INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR $ 90, ,016 CASH AND CASH EQUIVALENTS, END OF YEAR RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED/fUSED) BY OPERATING ACTIVITIES: Operating income Depreciation expense (Increase)/Decrease in accounts receivable (Increased/Decrease in prepaid insurance lncrease/(decrease) in accounts payable lncrease/(decrease) in prepaid revenue lncrease/(decrease) in deferred insurance proceeds Net Cash Provided by Operating Activities 55, ,435 (77,010) (1,929) 54,370 (2,992) $ The accompanying notes are an integral part of this statement. STATEMENT C

8 NOTES TO FINANCIAL STATEMENTS

9 Airport District No. 1 of Jefferson Davis Parish 7 NOTES TO FINANCIAL STATEMENTS 1. Organization and Significant Accounting Policies The Airport District No. 1 of Jefferson Davis Parish (District) was created by the Jefferson Davis Parish Police Jury pursuant to (LSA-RS 2.311) through the passage of Parish Ordinance 483 on March 7,1963. The District has the power and authority, within its boundaries, to acquire, construct, maintain, and operate airports and airport facilities, including both movable and immovable property. The District is a subdivision of the State of Louisiana and may issue bonds and levy taxes in accordance with Article 6, Section 30. The District may also by resolution or ordinance, establish, maintain, and collect proper and reasonable rates, charges, rents, or other fees for the use of the facilities of the airport. Under the provision of Parish Ordinance 635, dated May 10,1978, the District shall be governed and controlled by a board of commissioners composed of five members. Pursuant to Ordinance 635 these commissioners are appointed by the Jefferson Davis Police Jury for terms of two years from the date they assume their duties and shall serve without compensation. Basis of Presentation: The District has adopted the provisions of GASB Statement No. 34 and GASB Statement No. 37. These statements established standards for external financial reporting for all state and governmental entities, which includes a statement of net assets, a statement of activities, and a statement of cash flows. It requires the classification of net assets into three components - invested in capital assets, net of related debt; restricted; and unrestricted. These classifications are defined as follows: Invested in capital assets, net of related debt: This component of net assets consists of capital assets, net of accumulated depreciation, and reduced by the outstanding balances of bonds, mortgages, notes, or other borrowings that are attributable to the acquisition, construction or improvement of those assets. The District has no debt attributable to its capital assets. Restricted net assets: This component of net assets consists of constraints imposed by creditors (such as through debt covenants), contributors, laws or regulations of other governments, or through constitutional provisions or enabling legislation. The District has not restricted net assets. Unrestricted net assets: This component of net assets consists of net assets that do not meet the definition of "restricted" or "invested in capital assets, net of related debt." Reporting Entity: As the governmental authority of the parish, for reporting purposes, the Jefferson Davis Parish Police Jury is the financial reporting entity for Jefferson Davis Parish. The financial reporting entity consists of (a) the primary government (police jury), (b) organizations for which the primary government is financially accountable, and other organizations for which nature and significance of their relationship with the primary government are such that exclusion would cause the reporting entity's financial statements to be misleading or incomplete. GASB Statement No. 14, The Reporting Entity, as amended, establishes criteria for determining the governmental reporting entity and component units that should be included within the reporting entity. The basic criterion for including a potential component unit within the reporting entity is financial accountability. The GASB has set forth criteria to be considered in determining financial accountability. They include the following: (1) Appointing a voting majority of an organization's governing body, and (a) the ability of the police jury to impose its will on that organization and/or (b) the potential for the organization to provide specific financial benefits to or impose specific financial burdens on the police jury. (2) Organizations for which the police jury does not appoint a voting majority but are fiscally dependent on the police jury. (3) Organizations for which the reporting entity financial statements would be misleading if data of the organization is not included because of the nature or significance of the relationship. Because the police jury appoints a voting majority of the board and has the ability to impose its will on the organization, the District was determined to be a component unit of the Jefferson Davis Parish Police Jury, the financial reporting entity. The accompanying financial statements present information only on the funds (Continued)

10 Airport District No. 1 of Jefferson Davis Parish 8 NOTES TO FINANCIAL STATEMENTS maintained by the District and do not present information on the police jury, the general government services provided by that governmental unit, or the other governmental units that comprise the financial reporting entity. Fund Accounting The accounts of the District are organized on the basis of an enterprise fund. Enterprise funds are used to account for operations that are financed and operated in a manner similar to private business enterprises - where the intent of the governing body is that the costs (expenses, including depreciation) of providing goods and services to the general public on a continuing basis be financed primarily through user charges or where the governing body has decided that periodic determination of revenues earned, expenses incurred, and/or net income is appropriate for capital maintenance, public policy, management control, accountability, or other purposes. Budgetary Practices The District is not required and did not adopt a budget for the period covered by the accompanying financial statements. Cash and Cash Equivalents Cash includes amounts in demand deposits, interest-bearing demand deposits, and money market accounts. Cash equivalents include amounts in time deposits and those investments with original maturities of 90 days or less. Under state (aw, the District may deposit funds in demand deposits, interest-bearing demand deposit, money market accounts, or time deposits with state banks organized under Louisiana Law or any other state of the United States, or under the laws of the United States. Prepaid Expense Certain payments to vendors reflect the costs applicable to future accounting periods that are recorded as prepaid items. Fixed Assets All fixed assets are valued at historical cost or if contributed property, at their estimated fair value at the time of contribution. Repairs and maintenance are recorded as expenses; renewals and betterments are capitalized. The sale or disposal of fixed assets is recorded by removing cost and accumulated depreciation from the accounts and charging the resulting gain or loss to income. Fixed assets used in the proprietary fund operations are included on the statement of net assets net of accumulated depreciation. Depreciation of al! exhaustible fixed assets used by the proprietary fund operations is charged as an expense against operations. Depreciation has been calculated on each class of depreciable property using the straight-line method over the estimated useful lives of the assets as follows: Runways and Improvements Buildings and Hangers Improvements other than Buildings and Hangers Furniture and Equipment years years years 5-10 years Fund Equity Contributed Capital: Grants, entitlements, or shared revenues received that are restricted for the acquisition or construction of capital assets are recorded as contributed capital. Contributed capital is not amortized based on the depreciation recognized on that portion of the assets acquired from such contributions. Reserves Reserves represent those portions of fund equity legally segregated for a specific future use. (Continued)

11 Airport District No. 1 of Jefferson Davis Parish 9 NOTES TO FINANCIAL STATEMENTS Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Accordingly, actual results could differ from those estimates. Capitalization of Interest FAS-34, Capitalization of Interest Costs, requires that interest expenditures incurred during construction of assets be capitalized. FAS-62, Capitalization of Interest Cost in Situations Involving Certain Tax-Exempt Borrowings and Certain Gifts and Grants, concludes that constructed assets financed with the proceeds of taxexempt debt (if those funds are externally restricted to finance the acquisitions of the asset or used to service the related debt) should include capitalized interest only to the extent that interest cost exceeds interest earned on related interest-bearing investments acquired with proceeds of the tax related tax-exempt borrowing. Net interest cost capitalized totaled $-0- during the fiscal year ending in Compensated Absences The District has no employees and therefore has no compensated absences. 2. Cash and Cash Equivalents As of April 30, 2008, the District had cash and cash equivalents (book balance) totaling $419,657 as follows: Demand deposits $ 419,657 Interest bearing demand deposits - Total book balances $ These deposits are stated at cost, which approximates market. Under state law, these deposits (or the resulting bank balances) must be secured by federal deposit insurance or the pledge of securities owned by the fiscal agent bank. The market value of the pledged securities plus the federal deposit insurance must at all time equal the amount of deposit with the fiscal agent. Bank Balance $ Insured (FDIC) $ 104,660 Uninsured, Uncollateralized: Pledged securities held by pledging Bank's agent in Bank's name 315,490 Total Bank Balances Secured $ Even though this amount is considered uncollateralized under GAAP, Louisiana Revised Statutes impose a statutory requirement on the custodial bank to advertise and sell the pledged securities within 10 days of being notified by the District that the fiscal agent has failed to pay deposited funds upon demand. 3. Investments The District invests only in certificates of deposit. Investments are categorized into the following three categories of credit risk in accordance with GASB Statement No. 3 to give an indication of the level of risk assumed by the Commission. Category 1 - Includes investments that are insured or registered, or securities held by the government or its agent in the District's name. Category 2 - Includes investments that are uninsured and unregistered, with securities held by the counter party's department or agent in the District's name. (Continued)

12 Airport District No. 1 of Jefferson Davis Parish 10 NOTES TO FINANCIAL STATEMENTS Category 3 - Includes investments that are uninsured and unregistered, with securities held by the counter party or by its trust department or agent but not in the District's name. As of April 30, 2008, the District had no investments. 4. Accounts Receivable The following is a summary of receivables at year end: Customer property rentals $ 81,027 Gross Receivables $ 81,027 Less: Allowance for doubtful accounts (525) Net accounts receivable Accounts receivables are stated at the amount management expects to collect from outstanding balances. Management provides for probable uncollectible amounts through a charge to earnings and a credit to a valuation allowance based on an assessment of the current status of individual accounts. Balances outstanding after management has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to trade accounts receivable. Changes in the valuation allowance have not been material to the financial statements. 5. Due from Governments The amount due from other governments as of April 30, 2008 is a $3,051 receivable from the State of Louisiana/Department of Transportation and Development and a $87,833 receivable from the United States of America/ Federal Aviation Administration. 6. Capital Contributions from Governments During the year ended April 30,2008, the District received capital contributions from the following governmental entities: United States of America/Federal Aviation Administration $ 591,103 State of Louisiana/Department of Transportation and Development 31,111 Total Capital Contributions from Government Entities (Continued)

13 Airport District No. 1 of Jefferson Davis Parish 11 NOTES TO THE FINANCIAL STATEMENTS 7. Fixed Assets A summary of proprietary property, plant and equipment is as follows: Balance Adjustments/ Balance 05/01/2007 Additions Retirements 04/30/2008 Runway and Improvements $ 4,688,414 $ 767,395 $ - $ 5,455,809 Buildings and Hangers 2,121, ,121,934 Other Improvements 225,687 15, ,355 Furniture & Equipment ,922 Total Depreciable Assets $ $ $ 7,936,020 Less Accumulated Depreciation (3,093,871) Net Depreciable Assets $ 4,842,149 Construction in Progress $ - $ 39,453 $ - 39,453 Land _ Net Property Plant & Equipment $ Commitments As of April 30, 2008, the District had one construction contract project in progress totaling $39,453 for rehabilitation of Runway Remaining construction contract commitments for this project was $16,093 as of April 30, Risk Management The District is exposed to various risks of loss related to torts: theft of, damage to, and destruction of assets; injuries to employees; and natural disasters. As of April 7, 2007, commercial insurance coverage of property damage carried by Allstate Insurance Company had been cancelled. The District was able to secure coverage with Louisiana Citizens Insurance. The policy period is from August 15, 2007 to August 15, The District is no longer at risk. As of April 30,2008, the District also carries commercial insurance for general and aviation liability. During any construction phase, contractor nonperformance and liability risk is protected by requiring each contractor to post a performance bond and a certificate of liability insurance coverage for approved contracts. Previously settled claims resulting from these risks have not exceeded insurance coverage in any of the past three fiscal years. 10. Litigation and Claims Claim expenditures and liabilities are reported when it is probable that a loss has occurred and the amount of the loss can be reasonable estimated. No claim expenditures or liabilities are reported in the accompanying financial statements. The Airport Commission is not presently involved in any litigation as defendant. The District is involved in a matter concerning previously leased property in which the DEQ has not approved the environmental site report. The responsible party has been notified and in the opinion of legal council, the issue will be resolved and the District will have no exposure. 11. Contingencies Grant Disallowances. The District participates in a number of Federal Financial Assistance Programs. These programs are subject to further financial and compliance audits by the grantor agencies. The amount, if any, of expenditures which may be disallowed by the granting agencies cannot be determined at this time. Based on prior experience, management feels such amounts, if any, to be immaterial to the financial statements. (Continued)

14 Airport District No. 1 of Jefferson Davis Parish 12 NOTES TO THE FINANCIAL STATEMENTS 12. Non-Cancelable Operating Leases The District leases various parcels of land and/or buildings located at the airport to various aviation, industrial, and business concerns. These are noncancellable leases with obligated terms ranging from one to ten years or other maximums established by Louisiana Revised Statues. Most leases contain escalation clauses. As of April 30, 2008 future minimum rentals of non-cancelable operating leases of such property in aggregate are as follows: Fiscal Year 2009 $ 325, , , to Total $ Economic Dependence The District has one commercial customer that accounted for more than 10% individually of total operating revenues. 14. Related Party Transactions The District's airport is managed by a commercial agricultural aviation service company, Riceland Aviation, Inc., under a five year contract which began on February 1, Under the contract, Riceland is paid $8,500 per month ($102,000 annually) and allowed to occupy certain hangars, offices, and other physical structures for the operation of an aeriai seed planting, crop dusting, fertilizer business, and retail sale of aviation fuel in return for providing airport management services for the District. The in-kind rental value of the occupied facilities, estimated to be $11,280, has been recorded in the accompanying financial statements as operating revenue and as an expense for the year ending April 30, Two members of the Board of Commissioners leases an airplane hanger from the District at fair market value. These two leases provided $1,945 in revenues to the District during the fiscal year ending April 30, Leases and Commitments On February 1, 2005, the District entered into a lease operating agreement with Riceland Aviation, Inc. The term of the lease is for five years expiring on January 31, Under the contract, Riceland is paid $8,500 per month {$102,000 annually) and allowed to occupy certain facilities and use certain equipment and retail sale of aviation fuel in return for providing maintenance and operation of Jennings Airport. Riceland further agreed to pay the District $.05 per gallon of aviation fuel sold by Riceland on airport property. 16. Changes in Contributed Capital The following is a summary of changes in contributed capital: Donated Assets Capital Grants Balance, Beginning of Year $ 751,325 $ 4,208,107 Additions: Federal Aviation Administration - 591,103 Dept of Transportation and Development 31,111 Balance, End of Year $ $ 4, (Continued)

15 Airport District No. 1 of Jefferson Davis Parish 13 NOTES TO THE FINANCIAL STATEMENTS 17. Subsequent Events As of April 30, 2008, the District had one construction contract project in progress. The project is expected to be completed before the end of the fiscal year ending April 30, (Concluded)

16 14 INTERNAL CONTROL AND COMPLIANCE

17 BROADHURST, HAMILTON & COMPANY CERTIFIED PUBLIC ACCOUNTANTS 15 ROBERT C. BROADHURST, CPA (1989) JOE E. HAMILTON, CPA BARBARA B. HAMILTON, CPA NICOLE D. BROUSSARD. CPA 626 N. AVENUE G P. O. DRAWER 505 CROWLEY. LOUISIANA TEL: (337) FAX: (337) October 28, 2008 REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the Board of Commissioners Airport District No. 1 of Jefferson Davis Parish We have audited the financial statements of the business-type activities of the Airport District No. 1 of Jefferson Davis Parish,, as of and for the year ended April 30, 2008, and have issued our report thereon dated October 28, We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Internal Control Over Financial Reporting In planning and performing our audit, we considered the Airport District No. 1 of Jefferson Davis Parish's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Airport District No. 1 of Jefferson Davis Parish's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Airport District No. 1 of Jefferson Davis Parish's internal control over financial reporting. A control deficiency exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the Airport District No. 1 of Jefferson Davis Parish's ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of the Airport District No. 1 of Jefferson Davis Parish's financial statements that is more than inconsequential will not be prevented or detected by the Airport District No.1 of Jefferson Davis Parish's internal control. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected by the Airport District No. 1 of Jefferson Davis Parish's internal control. Our consideration of the internal control over financial reporting was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above.

18 16 Compliance and Other Matters As part of obtaining reasonable assurance about whether the Airport District No. 1 of Jefferson Davis Parish's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. This report is intended solely for the information and use of management and the Board of Commissioners, state awarding agencies, and the Legislative Auditor's office of the State of Louisiana and is not intended to be and should not be used by anyone other than these specified parties. However, under Louisiana Revised Statute 24:513, this report is in fact a public document. BROADHURST, HAMILTON & COMPANY Certified Public Accountants

19 AIRPORT DISTRICT NO. 1 OF JEFFERSON DAVIS PARISH 17 SCHEDULE OF FINDINGS AND RESPONSES AS OF AND FOR THE YEAR ENDED APRIL 30, 2008 SECTION 1 SUMMARY OF AUDITOR'S RESULTS 1. The auditor's report expresses an unqualified opinion on the basic financial statements of the Airport District No. 1 of Jefferson Davis Parish. 2. No control deficiencies were noted during the audit of the financial statements. 3. No instances of noncompliance material to the financial statements of the Airport District No. 1 of Jefferson Davis Parish, which would be required to be reported in accordance with Government Auditing Standards, were disclosed during the audit. 4. No control deficiencies were noted during the audit of internal control over major federal award programs. 5. The auditor's report on compliance for the major federal award program for the Airport District No. 1 of Jefferson Davis Parish expresses an unqualified opinion on the major federal program. 6. No audit findings relative to the major federal award program were noted. 7. A management letter was not issued. 8. The program tested as major program was the Federal Aviation Administration, Airport Improvement Program, CFDA # The threshold used for distinguishing between Type A and B federal award programs was $300, The Airport District No. 1 of Jefferson Davis Parish did not qualify as a low-risk auditee. SECTION II - FINANCIAL STATEMENT FINDINGS No findings material to the basic financial statements of the Airport District No. 1 of Jefferson Davis Parish were noted during the audit. SECTION III - INTERNAL CONTROL FINDINGS No findings related to the Airport District No. 1 of Jefferson Davis Parish's internal control, which would be required to be reported in accordance with Government Auditing Standards, were noted during the audit. SECTION IV - FINDINGS AND QUESTIONED COSTS - MAJOR FEDERAL AWARD PROGRAM AUDIT None reported. SCHEDULE 1

20 AIRPORT DISTRICT NO. 1 OF JEFFERSON DAVIS PARISH 18 SCHEDULE OF PRIOR FINDINGS AND QUESTIONS COSTS AS OF AND FOR THE YEAR ENDED APRIL Note: All prior findings relate to the April 30, 2007 audit engagement. SECTION I - INTERNAL CONTROL AND COMPLIANCE MATERIAL TO THE FINANCIAL STATEMENTS This section is not applicable. SECTION II - INTERNAL CONTROL AND COMPLIANCE MATERIAL TO FEDERAL AWARDS This section is not applicable. SECTION MANAGEMENT LETTER This section is not applicable. SCHEDULE 2

21 BROADHURST, HAMILTON & COMPANY CERTIFIED PUBLIC ACCOUNTANTS 19 ROBERT C. BROADHURST. CPA (1989) JOE E. HAMILTON. CPA BARBARA B. HAMILTON, CPA NlCOLE~D. BROUSSARD, CPA 626 N. AVENUE G P. 0. DRAWER 505 CROWLEY, LOUISIANA TEL: (337) FAX: (337) October 28, 2008 REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 To the Board of Commissioners Airport District No. 1 of Jefferson Davis Parish Jennings, LA Compliance We have audited the compliance of Airport District No. 1 of Jefferson Davis Parish with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement that are applicable to each of its major federal programs for the year ended April 30, The Airport District No. 1 of Jefferson Davis Parish's major federal programs are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs. Compliance with the requirements of laws, regulations, contracts, and grants applicable to each of its major federal programs is the responsibility of Airport District No. 1 of Jefferson Davis Parish's management. Our responsibility is to express an opinion on Airport District No. 1 of Jefferson Davis Parish's compliance based on our audit. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the Airport District No. 1 of Jefferson Davis Parish's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination of Airport District No. 1 of Jefferson Davis Parish's compliance with those requirements. In our opinion, Airport District No. 1 of Jefferson Davis Parish complied, in all material respects, with the requirements referred to above that are applicable to each of its major federal programs for the year ended April 30, Internal Control Over Compliance The management of Airport District No. 1 of Jefferson Davis Parish is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws, regulations, contracts, and grants applicable to federal programs. In planning and performing our audit, we considered the Airport District No. 1 of Jefferson Davis Parish's internal control over compliance with the requirements that could have a direct and material effect on a major federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the Airport District No. 1 of Jefferson Davis Parish's internal control over compliance. A control deficiency \r\ an entity's internal control overcompliance exists when the design oroperation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect noncompliance with a type of compliance requirement of a federal program on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the entity's ability to administer a federal program such that there is more than a remote likelihood that noncompliance with a type of compliance requirement of a federal program that is more than inconsequential will not be prevented or detected by the entity's internal control.

22 20 A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that material noncompliance with a type of compliance requirement of a federal program will not be prevented or detected by the entity's internal control. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in internal control that m ight be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. This report is intended solely for the information and use of management, the Louisiana Legislative Auditor, and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified. BROADHURST, HAMILTON & COMPANY Certified Public Accountants

23 AIRPORT DISTRICT NO. 1 OF JEFFERSON DAVIS PARISH 21 SUMMARY OF EXPENDITURES OF FEDERAL AWARDS AS OF APRIL 30, 2008 Federal Grantor/ Federal Pass-through Grantor/ CFDA Federal Program Title Number Contract Number Expenditures United States of America/ Federal Aviation Administration/ Airport Improvement Program Rehabilitation of Runway Lighting System for Runway 13-31, New Airfield Electrical Vault, and Pavement Analysis for Runway 08/ $ 402,855 United States of America/ Federal Aviation Administration/ Airport Improvement Program Installation of New Precision Approach Path Indicators and Runway End Identifier Lights for Runway $ 188,248 Note 1 - Scope of Audit Pursuant to the Governmental Auditing Standards Issued by the Comptroller General of the United States and OMB Circular A-133 All federal grant awards of Airport District No. 1 of Jefferson Davis Parish are included in the scope of the Government Auditing Standards issued by the Comptroller General of the United States and OMB Circular A-133. Note 2 - Basis of Presentation The accompanying schedule of expenditures of federal awards includes the federal grant activity of Airport District No.1 of Jefferson Davis Parish and is presented on the accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of the basic financial statements. SCHEDULES